Your Credit Card May Be Costing More Than You Think!
By Michael Ambrosio
Do you know what your credit card is truly costing you? Many
people assume that they do, but aren’t familiar with the
hidden fees that many credit card companies are charging. In
fact, if you don’t keep close tabs on your credit card, you
may end up paying hundreds of extra dollars per year—without
ever really knowing it!
And if you’re trying to budget your money, those hidden fees
can add up!
Let’s take a look at some of the most common credit card
fees, and then talk about how you can avoid them.
Grace Periods
In the past, we could always count on grace periods before we
ever had to start paying interest. For example, if we
charged our card to the limit, and could get it paid off
before the grace period expired, then it would be like a free
loan—we wouldn’t have to pay any interest.
Unfortunately, the credit card companies are making this
harder and harder to do. For starters, many of them have
reduced the traditional 30 day grace period to 20-25 days.
If you hold a credit card, but didn’t realize this, then
you’re likely paying interest without even knowing it!
What’s worse is that more and more credit card companies are
eliminating grace periods altogether. That means if you
charged lunch today at noon, at 12:01 pm, you would be
already paying interest on it.
How about your credit card? You need to take a close look at
the fine print and find out what kind of grace period you
have. If your credit card company has reduced it
significantly, or eliminated it altogether, you should
seriously consider canceling it and getting a more
user-friendly card.
Late Fees
When is the last time you checked to see what amount your
credit card company charges you for a late fee? The truth is
that these fees have doubled in just the past ten years, and
that, combined with the reduced grace period, means that the
credit card companies are raking in a lot of dough on late
fees!
If it’s possible, you should try and send off the check (or
electronic transfer) the day that you receive your credit
card bill. There are three reasons why it’s important never
to be late. The first is obvious; you will want to do
everything in your power to avoid a hefty late fee. Next, if
you are late, it will likely be reported to the credit agency
and you will have a bad mark on your credit report. The
third is the direst, and we’ll discuss it below.
Interest Rate Hikes
Did you know that if you are late–even one time—on your
credit card payment, the company will in all likelihood raise
your interest rates? That’s right; one late payment gives
them the right to do it. What’s more, that isn’t just
limited to your credit card payment. Any late payments from
any lender that show up on your credit report gives them the
justification to raise your rates, so be careful!
Copyright (c)2005 by Michael Ambrosio. You may publish this
article on your site or in your newsletter provided this
resource box remains in tact. Michael Ambrosio is the author
of many credit related articles. Visit his website today:
http://www.yourcreditandyou.com and rebuild your credit.
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